The Securities and Exchange Commission and its court-appointed receivers frequently refuse to advance corporate funds to pay defense costs for individual corporate employee and officer defendants.

To the SEC, every dollar paid to a lawyer is one less dollar available for investors. Many individuals, however, do not have the resources to fund their own defense. Thus, by cutting off corporate advances, the SEC is in effect denying counsel. Judge Lewis Kaplan’s recent decision in the KPMG case provides a strong basis to challenge the SEC on the ground that its interference with corporate advances contravenes the Fifth and Sixth Amendments to the Constitution.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]